Wednesday, November 30, 2016

Stocks Or Property? How To Invest Your Windfall

Money is one of the hardest things in your life to consider. It’s a factor of our everyday lives that controls pretty much everything we do – what jobs we do, where we live, how we conduct our usual lifestyles. It makes sense, then, that a sudden windfall can change your life. Although you may think that extra money can only be a good thing, it can actually create as many problems as it has the potential to solve if you don’t invest it wisely. Here are some ways you could consider investing your windfall…
Pay Off Your Debts

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If you have any debts caused by credit cards, this is the time to pay them off. For many people, the interest accrued by credit cards and store cards is as big a problem as the money that you’ve spent, so now is a good time to draw a line under those mistakes and move on. Many people make errors with their spending on credit cards when they’re young and don’t quite understand how their finances work yet. Now, therefore, is the time to correct that and to start afresh with a clean slate. Make sure that you keep your spending in check if you have any money left over from your windfall – it’s a good idea to put it away in the bank for a rainy day or an event like illness that means it’s hard to work.
Your Future

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Not all of us are happy in our careers and jobs, and if that’s the case for you, and if you’re a little worried about what you might do in the future, now is a good time to stop and re-evaluate your situation. It isn’t a good idea to give up your job – your windfall will only last you so long! – but if you want to re-educate yourself or to train further so that you can progress in your career, a good time to do it is after you’ve had a windfall. Consider working part time for a while so you can focus on your studies, or looking around for a new job. One of the greatest luxuries that money gives you is time, and the freedom to govern how you spend that time. If you invest in your future, and advance your career, then you’ll get considerably more long term satisfaction than you would if you blew the money on a new designer bag.
Purchase Investment Pieces

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Speaking of designer bags – if you’re a fashion buff, they’re a great way to invest your money in a beautiful item that is timeless and that won’t decrease in value. Herm├Ęs Birkin bags have increased in value 500% over the last thirty five years. You could also look into purchasing a Chanel classic flap bag or a bag by Celine, Dior or Prada. Look out for bags that are increasing in price for a stunning fashion piece that will also become a smart investment. You’ll get the best value out of classic shapes and designs, particularly if they’re made from a slightly different material or if they’re limited edition. Other leather products are good to invest in too.
Your Home

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If you have a decent sized windfall, chances are your first idea will be to pay off the rest of your mortgage. This is a great idea – it will be a huge weight off your mind and your home will always be one of your greatest assets. If you want to invest in your home further or you’d rather do that than pay off your mortgage, try some house renovations. Kitchen and bathroom remodelling could add a lot to the value of your house. Potential buyers tend to make their decisions about which house to buy based on the kitchen and bathroom because they don’t want to have to renovate those rooms themselves at their own expense, so doing them up yourself is a great investment. Plus, it means that you can enjoy your own home more in the meantime!

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If you aren’t very practised with finances, make sure you talk to a financial planner or an investments expert if you’re considering investing in stocks. Do some research on the best penny stocks and make sure that you don’t invest too much in them. They can make you a lot of money from a small investment, but they’re also high risk if you don’t really know what you’re doing. Bear in mind that you need to create a diversified portfolio of investments and that the smaller the company is, and the further away from your home country it is, the riskier your investment becomes.
Your Pension

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Saving for your future is one of the wisest things you can do with your money. Having that nest egg in place for your retirement will reassure you until the time comes for you to give up work. That cushion will ensure your financial security for a long time and also possibly enable you to retire early. This is another time where your money can buy you the freedom to decide what exactly you want to do – and that freedom will be absolutely crucial to your future happiness.

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If you’ve had a good amount of money from your windfall, property is one of the most concrete and reliable ways to invest. Consider buying a small rental property, but remember that as well as giving you a monthly salary that will likely cover the mortgage, a rental property is also a responsibility that takes a good amount of maintenance. As a landlord it will be your responsibility to look after your tenants and to keep the property in a good state for them to live in. After all, the nicer the property the more you can charge in rent! When you’re picking out a rental property to invest in, make sure you consider all the factors. Check out the local amenities – is it near a supermarket and local schools if it’s likely to become a family home? Transport links are also very important if the location is a commuter hub.

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